Protests protect procurement system (Part 1)

About five years ago, I enjoyed attending several functions that featured Steven Kelman, then the administrator of the Office of Federal Procurement Policy. Kelman had an uncanny ability to listen to everyone in the acquisition community and to provide progressive leadership for them. His contributions at OFPP included quarterbacking the passage of the Federal Acquisition Streamlining Act of 1994 and the Federal Acquisition Reform (Clinger-Cohen) Act of 1996, both of which made helpful changes in federal procurement.

But after reading Kelman's Op-Ed piece "Silence of protesters' bark signals new era" [FCW, Feb. 22] I wondered if his absence from government had caused him to develop a memory with only selective retention of how government procurement really works. He seems to have forgotten that the procurement system is made up of people who must sometimes be reminded that they are spending taxpayers' dollars and will be held accountable for their actions. It is for that very reason that bid protests are needed.

In what could be called an obituary for bid protests, Kelman wrote that protests

* Are time-consuming and expensive.

* Are a blot on the career of a civil servant if the agency loses the protest.

* Make agencies risk-averse, bureaucratic and slow in source selection.

* Have a devastating effect on the spirit of partnership between government and vendors.

Kelman urged agencies to take their share of responsibility for putting bid protests behind us and indicated that the "old days of procedural trivia and of a bureaucratic process driving agencies willy-nilly into nonsensical source-selection decisions are happily gone."

Pretty heady stuff. But is it really true that bid protests are mere procedural trivia that drive agencies into making foolish decisions? Hardly. What bid protests really do is ensure that agencies adhere to the Competition in Contracting Act's (CICA) goal of achieving "full and open competition," which most economists acknowledge results in the greatest value for the government when administered properly. Bid protests serve as an important safety valve to enforce the law and as an important warning to procurement officials who would disregard it.

Files at the General Accounting Office are full of agencies that have violated the law or procurement regulations in ways that include ignoring the evaluation scheme in the solicitation, not considering price as an evaluation factor or refusing to make an award to a small business in a set-aside procurement. Even more astonishing, the agencies themselves would not take corrective actions on such obvious violations, which were an insult to the integrity of the competitive procurement system, which GAO is duty-bound to uphold, and did uphold.

The private acquisition community would be inclined to agree with Kelman that protests should be abolished if agencies were willing to correct such egregious mistakes. However, some procurement officials remain unwilling to admit that violations of law or regulations occur and correct those mistakes. That is why the system needs bid protests.

Protests occur in only a small percentage of procurements (less than 1 percent or 2 percent) but are more frequently made on large-dollar-value acquisitions. The number of protests has declined about 15 percent in each of the past three years at GAO, and only about 13 percent of the fully developed GAO protests were sustained, which amounts to an average of about 65 cases in each year from 1996 to 1998.

How could such a small and declining number of protests have such an adverse effect, as Kelman suggests? The better interpretation is that protests are rare, and sustained protests are rarer still. The protests nevertheless serve as a valuable mechanism to ensure that agencies provide due process and comply with the law - something to which offerors who spend large sums on proposals are entitled.

It is highly doubtful that protests make agencies "excessively risk-averse, bureaucratic and slow in source selection, seeking redundant documentation and objectification of every decision to be able to defend themselves in the event of protest," as Kelman stated. Acquisition professionals know that they must document for their supervisor why a purchase is the best value or has the best return on investment. If they can do that, they can easily survive any protest.

In my 20 years of government service and 10 years of private law practice, I have found that the vast majority of the acquisition work force is highly professional, seeks best value and follows the rules. But a small percentage of federal procurement officials "steer" contracts, flout CICA, ignore their own solicitations, lack important training or seem to have their own procurement agenda. For all of those reasons, we need to have the bid protest safety valve available to contractors who expend their scarce resources preparing offers and deserve to be treated fairly by the acquisition work force.

-- Lieberman is a partner at Kinosky, Phillips & Lieberman, PLC, Arlington, Va., and is a former deputy inspector general at the Defense Department.


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